Severstal awarded for the sale of Rouge Industries

Severstal awarded for the sale of Rouge Industries

In the bankruptcy court hearing held yesterday, the sale of substantially all the assets of Rouge Industries Inc. to Severstal received approval from the court. The sale of assets will be in compliance with the conditions of the non-binding asset purchase agreement between Russian Severstal and Rouge Ind signed on Oct 23, the day Rouge Ind. filed for bankruptcy protection. In the tender that took place last Friday, Severstal was selected as the highest and best bidder with its bid raised from $215 million up to $285.5 million. Apart from Severstal, the other and only bidder in the tender was US Steel. It is commented that it was the support given by the United Auto Workers (UAW), representing over half of Rouge Ind. Workers, which helped Severstal win the tender. The gaining achieved from the sale is expected to meet the repayment to the creditors and administrative expenses, with no amount to be distributed to the shareholders. All proceedings regarding the sale are forecasted to end by January 30, 2004.